New ‘Waters of the US’ Rule on Hold: Enduring Debate Creates Uncertainty for Developers

In 1985, the US Supreme Court issued the first of three key decisions interpreting the phrase “waters of the US” to define the scope of federal permitting jurisdiction under the Clean Water Act. Thirty years, three Supreme Court decisions, and one million comments later, the US Army Corps of Engineers (the Corps) and the Environmental Protection Agency (EPA) issued their new definition of “waters of the US” (or WOTUS) on June 29, 2015. Even before it could take effect, the rule was suspended nationwide creating confusion and uncertainty regarding Clean Water Act permit requirements.

When the Clean Water Act was enacted in 1972, Section 404 required permits for the discharge of dredged or fill material into “navigable waters.” The Act defined navigable waters as “waters of the US, including the territorial seas.” When the Section 404 regulations were ultimately adopted in 1984, a wide range of aquatic areas, many of which were clearly never subject to navigation, were included under the WOTUS umbrella. As a result, much of the controversy over the Section 404 program involves the long regulatory reach to require permits for activities in “waters of the U.S.” that are neither navigable nor contain water.

The tension between the regulated and the regulators over WOTUS was first addressed by the Supreme Court in United States v. Riverside Bayview Homes, Inc. In that 1985 decision, permits for the discharge of fill material into wetlands adjacent to WOTUS were upheld. In 2001, however, the Supreme Court rejected the Corps’ assertion of jurisdiction over isolated ponds in its decision in Solid Waste Agency of Northern Cook County v. US Army Corps of Engineers or SWANCC at it has come to be known. In that case, the Corps — citing the Commerce Clause — required permits to fill an old sand and gravel mine for a municipal landfill because rainwater ponded in isolated pits and migratory birds flying interstate used those pits. Clearly, ponded rainwater with no connection to a “navigable water” should not be subject to federal regulation merely because a duck landed there. While the federal agencies stopped regulating isolated waters after the SWANCC decision, the Court did allow that these “waters” could be subject to state regulation. California very quickly issued a memorandum confirming that it had the authority to require permits for isolated waters.

SWANCC was followed in 2006 by Rapanos v. United States in which the Court, in a plurality decision, held that the Corps exceeded its authority by requiring a Section 404 permit to fill wetlands adjacent to non-navigable tributaries. In reaching its decision, several justices articulated their definitions of WOTUS ranging from Justice Stevens’ opinion fully supporting the government’s theory that any connection to a navigable water supported jurisdiction to Justice Scalia’s reliance on Webster’s Dictionary to articulate a definition that required waters to be relatively permanent and wetlands to have a continuous surface connection to navigable waters. Justice Kennedy’s plurality opinion, which described the need for non-navigable waters to have a “significant nexus” to traditional navigable waters, prevailed, and the term “significant nexus” became an integral part of the Section 404 permit process.

Susan K. Hori is a partner in the Costa Mesa office of Manatt, Phelps & Phillips. Her practice focuses on land use planning issues, including development entitlements and regulatory permits for real estate development projects and the resolution of environmental issues affecting real property. She also clients on issues involving state and federal regulations, including Section 404 permitting under the Clean Water Act. She can be reached at 714-371-2528 or SHori@manatt.com.